FriendFinder Networks' CEO Discusses Q3 2012 Results - Earnings Call Transcript

| About: FriendFinder Networks (FFNT)

FriendFinder Networks (FFN) Q3 2012 Earnings Call November 14, 2012 4:30 PM ET

Executives

Anthony Previte – President & Chief Executive Officer

Ezra Shashoua – Chief Financial Officer

Rob Fink – KCSA Strategic Communications

Analysts

Kevin Cohen – Imperial Capital

Lance Vitanza – CRT Capital Group

Wayne Teetsel – Stonehill Capital Management

[Saraj Dowgi] – Dauphin Investments

Operator

Ladies and gentlemen, good day and welcome to the FriendFinder Networks, Inc. Q3 2012 Earnings Conference Call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mr. Rob Fink. Please go ahead, sir.

Rob Fink

Thank you, Operator, and thank you everyone for joining us for the FriendFinder Networks Q3 2012 earnings conference call. Before I turn the call over to the company’s Chief Executive Officer Anthony Previte I would like to read the following Safe Harbor statement.

Certain statements made on this conference call regarding FriendFinder Networks and statements related to future expectations, beliefs, goals or prospects constitute forward-looking statements made within the meaning of Section 21E of the Securities & Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Any statements that are not statements of historical fact, including statements containing the words “believe,” “plan,” “anticipate,” “expect,” “estimate” and similar expressions indicating future performance, results, or objectives should be considered forward-looking statements.

A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements. FriendFinder Networks assumes no obligation to update the forward-looking statements in this communication except as otherwise required by law. Participants are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date thereof.

Today we will also discuss certain non-GAAP disclosures and a reconciliation to GAAP information is included in the press release issued earlier today. The factors that could cause actual results to differ materially from the company’s expectations are detailed in the company’s filings with the Securities and Exchange Commission. Please read the “Risk Factors” section of the Form 10(k) for the year ended December 31, 2011, filed with the SEC on March 29, 2012, and the Form 10(q) for the quarter ended September 30, 2012.

The company does not undertake to revise any forward-looking statements to reflect future events or circumstances. With that, I will now turn the call over to CEO, Anthony Previte. Anthony, the call is yours.

Anthony Previte

Thank you, Rob, and welcome everyone to the FriendFinder Networks Q3 2012 earnings conference call. During today’s call I will provide a high-level overview of Q3, discuss some key highlights and review our operations. I will then turn the call over to Ezra Shashoua, our Chief Financial Officer, to review our financial results for Q3 before taking questions.

During Q3 we continued to improve our business operations and explore opportunities to strengthen our financial position. We believe the actions we have taken will help us to further optimize our business and position us to capitalize on long-term growth opportunities. The strategic decision we announced earlier this year to shift from a growth model primarily focused on driving new registrations across our large affiliate network in favor of a strategy focused on enhancing user quality and member conversion within our core flagship brands helped us improve our operational efficiency and increased adjusted EBITDA during the quarter.

While this transition is progressing smoothly as we expected, it negatively impacted our revenues. That said, we expect the revenues to grow over time. As we improve conversion rates and increase our marketing efforts we believe we will attract a stickier, more valuable user with a lower cost of acquisition. As we discussed on our last call, our growth strategy remains focused on improving three core metrics: member conversion, renewals, cost per gross addition. Our progress in Q3 is encouraging and we remain on track with these efforts.

During Q3 we saw improvements in a number of our core metrics including member conversion rate. Compared to the same period last year our conversion rate increased to 4.9% from 4.1% in our adult segment, and to 2.1% from 1.8% in our general audience segment. These improvements were made despite a decrease in our credit card processing approval rates both domestically and abroad.

Our second core metric, renewals, is a byproduct of our churn rate. Our general audience segment delivered a significant improvement in churn, going from 19.6% in Q3 2011 to 16.9% this quarter. This success is primarily attributable to the consolidation of our general audience and mobile segments which has gone extremely well and produced a number of synergies.

To further expand on this consolidation, we moved our general audience operations, which was based in Seattle, to our Sunnyvale office and merged it with our mobile segment. We also moved our Compliance and Risk Divisions from Las Vegas to our Sunnyvale offices as well. With our general audience and mobile segments working together, combined with bringing back some other office functions to Sunnyvale we’ve been able to recognize additional synergies, the primary one being (inaudible) rate as well as a reduction to our general overhead.

The third metric, cost per gross addition, is driven primarily from our marketing efforts. As we discussed previously, our increased focus on analytics have provided us with the ability to assess our marketing on a more granular, real time basis. While we have maintained an ROI positive advertising spend throughout the quarter we haven’t reached the level of scale to drive our top line growth as of yet.

We have, however, seen improvements within our adult segment where our average revenue per user, or RPU, increased 7.5% quarter-over-quarter and 6.2% year-over-year. Additionally, our average lifetime net revenue per subscriber improved almost 24% over the prior quarter. We believe these improvements in part speak to the strength of our marketing efficiencies which we expect to improve upon throughout all of our business segments.

While these improvements as a whole netted increased efficiencies and improvements to certain key metrics our revenue continued to decline. Despite this we were able to improve adjusted EBITDA for the quarter to $22.5 million, up 11% year-over-year and up 33% compared to the prior quarter. Additionally we expect to see similar levels of adjusted EBITDA going forward supported by the rollout of new products and enhancements in Q4 to our flagship brands as well as the launch of a new interactive video product that we’re all very excited about.

Our improved adjusted EBITDA results this quarter were achieved despite problems we had in our dealings with Visa USA. During the quarter, Visa USA fined the company over $1 million. Although we continue to process transactions through Visa USA we are appealing these fines and believe the fines to be without merit.

Also contributing positively to our results was an increased revenue contribution from Europe, which was up 8.8% from the prior quarter – our second consecutive quarter of increased revenue contribution from this region – and increased video entertainment revenue, which was up 4.4% year-over-year. We attribute the revenue growth in Europe to our successful implementation of geographic pricing as well as renewal cycles now beginning to kick in.

During the quarter our live interactive video segment saw the first decline of revenue in eleven quarters. One positive takeaway from this, however, is that our total minutes actually increased 2% when compared to the prior year. Our revenue decreased because we scrubbed more orders aggressively than we have in the past. For those unfamiliar with the term “scrubbed” it implies that we vet the authenticity of credit card information to reduce our exposure to fraudulent credit card use. The short-term effect of these efforts has been a reduction of revenues, but over the long term this will result in higher quality revenues.

We also continued to improve our core websites. During Q3 we unveiled a site makeover to OutPersonals.com, our leading gay dating site. The makeover included a much faster and more efficient registration process, updated search, and innovative interactive video technology on the homepage. The redesign has been very well received. We’ve gotten positive feedback from our subscribers and members. So far we have increased confirmed registrations by 18% Q3 over Q2 and revenue increased 30% with a 26% reduction in churn. Mobile revenues are also increasing dramatically in that sector.

Lastly, our flagship website AdultFriendFinder.com continues to perform well. We have enhanced the website and in response our members are showing their enthusiasm. For example, we averaged 2.5 million likes each month since June, a significant increase over prior months. With that said I’ll hand the call over to Ezra to discuss the financials in more detail. Ezra?

Ezra Shashoua

Thanks, Anthony. As Anthony mentioned earlier, we have seen some improvements in certain metrics despite a decline in revenues. We’re controlling expenses and managing the bottom line which we believe will be a foundation for revenue growth going forward.

Revenue for Q3 2012 was $77.7 million, a decrease of 6% compared to $82.7 million in Q3 2011. The decrease in revenue was primarily attributable to a decrease in affiliate-based traffic and lower resulting internet revenue as the company continues to eliminate lower margin co-brands. Ending subscribers for Q3 2012 were just over 800,000, a decrease from the same period last year as we actively worked to reduce our number of co-brands.

For adult websites, average revenue per subscriber for Q3 2012 was $22.16, an increase of 6% compared to Q3 2011. Cost per gross addition for Q3 2012 was $40.16, a decrease of 11.2% compared to Q3 2011. Average lifetime net revenue per subscriber for Q3 2012 was $84.75, an increase of 1.2% compared to Q3 2011.

Gross profit for Q3 2012 was $52.1 million, a decrease of 5% compared to Q3 2011. The decrease in gross profit was primarily the result of reduced revenue partially offset by reduced affiliate expenses and higher margins. Income from operations for Q3 2012 was $17 million, an increase of 15.5% compared to Q3 2011. The increase was primarily attributable to a decrease in operating expenses across the board.

Net loss from continuing operations for Q3 2012 was $5.7 million or $0.18 a share, a slight change from $5.4 million or $0.18 per share for Q3 2011. Loss from discontinued operations was $2.1 million or $0.07 a share which resulted from the shutdown of all JigoCity operations. Going forward, we will not have any further losses from discontinued operations due to Jigo.

Adjusted EBITDA was $22.5 million for the company, an increase of 33% from the previous quarter. As of September 30, we had cash and cash equivalents of $14.6 million and we also had principal debt outstanding of $504.4 million. Our leverage ratios remain strong with 3.1x first lien debt to EBITDA leverage and cash interest coverage of 2.3x.

As we announced last week, we’ve started to explore opportunities to refinance our long-term debt. The debt market is strong and we believe there is a compelling opportunity to complement the improvements of our operating results by strengthening our financial structure. To do this with the support of our Board and a vast majority of our senior lenders we made a strategic decision to hold back an excess cash flow payment due our lenders. The company received forbearance from over 80% of its senior lenders and suspended its required excess cash flow payment which was due November 5.

We have adequate cash to make this payment, but in order to conserve resources and take advantage of what we see as favorable market conditions, we felt this was a prudent action. The support from our principle lenders is encouraging and we believe validates the value of this opportunity. We will continue to pay interest during the refinancing phase and we’ll work with CRT Capital Group, our investment banking advisor, to accomplish this effort in an efficient and beneficial manner to all constituencies.

Free cash flow per common share was $0.45 for Q3 ended September 30, 2012. And with that I’ll turn it back over to Anthony for closing remarks.

Anthony Previte

Thanks, Ezra. Before I open the call up for questions I’d like to thank our employees, shareholders, and lenders for their support. While we are starting to see some positive results we’ll continue to focus on improving our operational efforts and remain optimistic about our long-term strategy. I’d now like to open it up for questions. Operator?

Question-and-Answer Session

Operator

Thank you. (Operator instructions.) We’ll take our first question from Kevin Cohen with Imperial Capital.

Kevin Cohen – Imperial Capital

Good afternoon and thanks for taking the questions. I guess in terms of the cost-cutting program that was previously outlined, how much of that is still to flow through the numbers?

Ezra Shashoua

We’re basically there in terms of the numbers flowing through. We’ve reduced our, we just had another small staff reduction over the summer and I think in Q4 you’ll get a true run rate of where our cost cutting will take us. So I don’t think Q3 represents all of the enhancements but you’ll see it in Q4.

Kevin Cohen – Imperial Capital

And then I guess in terms of selling and marketing expenses, do you think the current run rate is pretty indicative of what the company needs to spend to remain competitive, to generate the level of EBITDA it’s currently generating? Or how do you sort of see that trending?

Anthony Previte

It’s Tony. I would like to probably want to increase the spend towards the end of the year. We have two good products I feel that will have some results and I’d like to spend some money and put some money to them. So I think the spending will probably stay in line. There’ll be some fluctuations – there’s a bit of seasonality to the adult dating business so we have to get ready for Q1, so there’ll be an increased spend probably toward the end of this quarter into Q1. But I think the EBITDA number should hold very close.

Kevin Cohen – Imperial Capital

And then I guess, Tony, just the last question: the company’s certainly done a very good job the last couple of quarters turning around the EBITDA run rate, and earlier you mentioned that the run rate is probably more or less sustainable going forward – kind of a similar I think was the word you used. What are some of the growth drivers that will keep EBITDA roughly flat, I guess just given some of the cost cuts have largely flowed through at this point? I’m looking at gross profit year-over-year still down a little bit but any growth items to kind of bridge the similarity with that going forward?

Anthony Previte

I have a lot of optimism about Europe. It’s just I think we’re about a quarter of the way there with what we can do with Europe. I believe Europe on a two-year horizon will probably represent two-thirds of this company’s revenue with a lot more localization. We have a really good interactive video product which will go live in Europe first before it goes live in the United States, and I feel very encouraged about that. And I think the mainstream dating business is going through a change and I think that is more of a social proposition and we have a really good way to monetize that I feel over the next two or three quarters; and I think that will drive growth or at least it’ll restore some of the losses that we traditionally see in the [PG] marketplace.

Kevin Cohen – Imperial Capital

And then I guess in terms of Europe being about two-thirds of revenues, will it be a similar percentage of the EBITDA picture going forward?

Anthony Previte

That would be my goal. When you look at goals, that is one of my goals, is to look at Europe heavily. You look at the total economic potential of Europe and I look at our penetration, and we have a lot to do there. And we traditionally have not done a great job in terms of localization, and I think as we’ve focused on that and pricing we’ve seen a lot of improvements now. And that’s a market that is larger than the United States and I don’t see any reason why that should not, over the next two years, become a more substantial part of our revenue and EBITDA contribution.

Kevin Cohen – Imperial Capital

Thanks a lot, Tony, very helpful.

Anthony Previte

No problem.

Operator

We’ll take our next question from Lance Vitanza with CRT Capital Group.

Lance Vitanza – CRT Capital Group

Hi guys, congratulations on the quarter. I just had a couple of quick questions, the first on the EBITDA number in Q3 and I apologize if I missed this earlier but did that reflect anything from the JigoCity or is that completely now out of the numbers?

Ezra Shashoua

What we do is we add back the JigoCity loss from discontinued operations because it was mostly non-cash, but going forward we won’t have any add-backs to the discontinued operations.

Lance Vitanza – CRT Capital Group

Perfect, that was my question. And then on the churn statistics, I’m just wondering how reliable a barometer of your business that is given the various discrepancy in the economic profile – given that you’ve got some of the guys that are paying monthly, some annual, etc. Can you talk in a little bit more detail about what you’re seeing within the categories and anything there that should make us feel either better or worse than what the headline numbers would suggest?

Anthony Previte

I think the problem that we also run into with subscribers, is unlike a telecom where you expect someone to be here for continued periods of time, our subscriber metric doesn’t necessarily reflect someone who’s been coming and going for five years; and it doesn’t put the relative value of people. An annual subscriber, for example, on a relative monthly value is worth in terms of revenue one-third that of a monthly subscriber. And we scratch our heads at a way that we can display metrics in a way that’s meaningful and best for investors to draw conclusions, but sometimes even we have a hard time doing it.

If someone were to ask me would I rather have 50,000 German subscribers or 50,000 Brazilian subscribers, no offense to the people in Brazil but I’d rather have the 50,000 German subscribers. And I think subscribers, I think the subscriber numbers will begin to level out and I believe at some point in the future, possibly starting in Q1, we will supply that metric differently by showing subscribers by a relative value of the subscriber – saying “These are subscribers for Western Europe, these are subscribers for North America, these are subscribers for South America.” And I think that number may give people more comfort than the numbers we have right now.

Lance Vitanza – CRT Capital Group

Yeah, I think that’d be a big help. Thanks very much.

Anthony Previte

You’re welcome.

Operator

We’ll take our next question from Wayne Teetsel with Stonehill Capital Management.

Wayne Teetsel – Stonehill Capital Management

Hi Tony, how are you?

Anthony Previte

I’m well, Wayne, how are you? Thanks for asking.

Wayne Teetsel – Stonehill Capital Management

Okay. So Tony, I’m not sure I caught it, your comment about the growth in Europe that you’re now optimistic about. Do you think it could become two-thirds of your revenue within what time and what percentage of your revenue?

Anthony Previte

My goal is to have Europe be two-thirds of our revenue within the next two years. That is my goal, and bearing in mind that you’re finding it’s a country-at-a-time battle that you’re doing. And I’ll try to give the greatest example I can give: AdultFriendFinder is a powerhouse brand to English speakers, but to non-English speakers it doesn’t really mean anything. And we’re investing a lot of time in specific countries by re-launching, using URLs that are localized to that content. In Italy we have a name that is very friendly to Italy that we’re about to roll out. So as a goal I would like to see Europe be two-thirds of our revenue within the next two years. Right now…

Wayne Teetsel – Stonehill Capital Management

That’s up from about 25% today, is that right?

Ezra Shashoua

It’s about 28%, 29% right now.

Anthony Previte

Yeah, I call it a third of revenue but Ezra can correct me and say exactly 28%, 29%. I feel very optimistic about it. I look at the pricing tests we’ve done; I’ve looked at the renewals. You know, payment forms are opening up. SMS billing was once 40% of the money went to the SMS, the actual biller itself, and now we’re seeing that start closing in on 20% and 15%. And to a certain degree we’ve had decent success leveraging the Penthouse broadcast brand as a marketing tool for our interactive video and for our adult dating products.

Wayne Teetsel – Stonehill Capital Management

Okay. And can you also elaborate on your statement that the mainstream business is going through a structural change I think you said, and you’re increasingly optimistic that you’re going to be able to better monetize your mainstream sites over the coming quarters?

Anthony Previte

Yeah, what we did was, you know, the mainstream social networking dating space is incredible competition. There’s a giant gorilla in the space, Match, which is a very well-run company that has a large market share; and dating kind of launched itself on the internet business as being “I have tons of traffic, how do I monetize it?” And traditionally dating has always been the way that a lot of sites monetize their traffic. And when we moved into our mobile group we started to see performance increases, because the people who are dating tend to be more mobile.

There’s a lot more social media aspects of people into Facebook and Twitter, and how they’re connecting and how they’re meeting and linking up. So we’ve seen some really good synergies there and that product may eventually find itself as really a mobile product and not necessarily a web-based product. And we’ve managed to get back some customers that we had previously lost because the value proposition now is how do you monetize social media?

And that’s really the manifest for everyone that’s in that group right now for me is let’s figure out ways to monetize social media because that’s a much easier sale to large traffic sources directly, and that is the plan. And so far we’re seeing some good results. We saw churn drop down a bit; I think next quarter we have some really good stuff coming out. I mean hopefully over the next two or three quarters we can turn that into something that had declined and something that’ll be contributing a couple of million to EBITDA a year.

Wayne Teetsel – Stonehill Capital Management

Alright, because in the last quarter I see the general audience websites were $1.3 million in revenue versus $3.1 million a year ago, and it doesn’t really quite jibe with the statement that you’re seeing traction in that area recently. But so you obviously see [the hope of the future].

Anthony Previte

It’s relative. I mean it’s to the future. There’s a lot of work that still has to be done with this product but seeing the churn stop sliding, I think having the mobile team that was here handle it because they’ve had a pretty good track record with interactive video and other things. I feel pretty good about the future of that. If you’re asking me will it ever be 20% of our business? I don’t think so.

Wayne Teetsel – Stonehill Capital Management

Okay. Okay, thank you, that’s helpful. And then my last question, once again I’m just looking for a little elaboration on something in the press release which you also mentioned earlier in the comments, and that’s the rollout of new products and enhancements in Q4 to the flagship brands as well as the new interactive TV product. That interactive TV product will be in Europe you said? Can you maybe give us a little color around what other products and enhancements you’re going to roll out?

Anthony Previte

Yeah, there’s basically three that I’ll talk about, that I’ll freely talk about. One is the interactive video product, it has been out for a period of time and it just has a longer sales cycle because it is going through broadcast television and I feel very optimistic about that product – one, as being a revenue source upon itself but also being a valuable sales tool for our interactive video.

The second is on our flagship brands, we actually are putting out an API where other people can develop programs and applications and widgets for the flagship brands; and I expect that to be out this quarter and that’s something that we’re trying to line developers up to enhance the overall experience with that product. And the last is the monetization of social media. I think we have a good plan – I don’t want to talk about it too much. I think there’s a good plan there. I think we’ll test that in the mainstream marketplace first before we decide to see how well we can move it into the adult marketplace.

But it’s the question that everyone whose got tons of traffic asks themselves is “How do I monetize social media?” and it’s something that we think we have a good solution for people who are comfortable with our space.

Wayne Teetsel – Stonehill Capital Management

Okay, thank you very much, Tony.

Anthony Previte

You’re welcome.

Operator

And we’ll take our next question from [Saraj Dowgi] with Dauphin Investments.

[Saraj Dowgi] – Dauphin Investments

You have such a tight set of [covenants] I wonder how you focus on operations. I mean it’s really tight. You cannot [count] on that $20 million in any quarter.

Ezra Shashoua

Well, we were able to go to do $22.5 million of EBITDA this quarter. Going forward we feel confident in our ability to stay above the levels in the covenants, and I think this quarter was a good barometer as Tony said before. We see a similar amount of EBITDA going forward and I think the year is going to turn out consistent with the guidance I gave earlier in the year.

[Saraj Dowgi] – Dauphin Investments

Okay, and so what’s the focus of the… I mean is it refinancing or restructuring? How have you started the process? I mean is it a refinancing of the whole cap structure or partly, or how are you approaching it?

Ezra Sashoua

It’s the refinancing of the entire cap structure. It really isn’t possible to refinance one part without the other because the maturities are so close to each other. And as we said in our press release and I mentioned in my remarks, we retained CRT to help us put together a refinancing plan. We’ve been in discussions with our senior lenders who have been very cooperative, and we’re now starting the conversations with the second lien lenders. So I mean we’ll have more information as we go forward in the quarter but right now that’s, from the capital structure of the company the first priority is to get a refinancing done.

[Saraj Dowgi] – Dauphin Investments

Okay. Can you update me on two things: one is that last call I think you said 5000 co-branded websites will be closed by the end of 2012, and the company was running 28,000 websites. I mean you would like to see it going down to 15,000 to 20,000. How rapidly is that being progressed? How many websites do you have? There’s still a big concentration?

Anthony Previte

We are continuing to close down co-brands or white labels with two criteria: one is based purely on profitability, the second one is based on overall risk. And we continue to close down many of them. Some co-brands we’re very loyal to and I like those people. There are just some that are out there that we need to close down and be more manageable, and focus on our core brands.

One of the things I had talked about with Europe for example, there’s no way for me to make 14,000 co-brands that are localized to Italy for example – it’s just not possible. I could probably do five or six without draining my resources but beyond that it becomes very difficult. So a lot of the things that we’re doing going forward, a lot of the enhancements that we build onto products, a lot of our changes will only [set out] on flagship brands because the maintenance on multiple brands is far too great to manage.

[Saraj Dowgi] – Dauphin Investments

I see, okay. And the second effect is your relationships with your affiliates. I mean how are they accepting your [newer] change in business models and the way you are functioning right now?

Anthony Previte

I’m sorry, can you repeat that? My phone broke up.

[Saraj Dowgi] – Dauphin Investments

Your affiliates, how is your relationship with the affiliates, the various mechanisms? Because I see the payments to affiliates of course coming down – do you have their support in this [transformation]?

Anthony Previte

We absolutely have their support. Our affiliates, I was just at – in the middle of the storm I was at our Annual Affiliate Gathering with our top affiliates in the Turks & Cacaos, hearing what they’re looking for in products, hearing what they want. Our affiliates run a very broad gamut of people. Some of them… We have two affiliates who every time I see them bring me to tears because we’ve changed their lifestyle and they’ve grown an entire business – they’ve been doing this for 14 years. And they operate co-brands, by the way, and I would never take theirs away.

I think the majority of our affiliates who are in a business relationship with us are incredibly supportive. There’s a lot of affiliates out there who are just pure mercenaries by force of habit and will jump around from place to place; and they could be supportive of me today and not tomorrow. You know, it’s a mercenary behavior so I really can’t tell. But the majority of our affiliates who have been with us, who represent 90% probably of our affiliate traffic – we are very close to, I speak to. I speak to affiliates every day.

[Saraj Dowgi] – Dauphin Investments

Okay, thanks a lot.

Anthony Previte

You’re very welcome.

Operator

And there are no further questions at this time. That does conclude today’s conference. We thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!